Faith Haven Senior Care Centre v. SEIU Healthcare Michigan

Filing 26

ORDER denying 17 plaintiff's Motion for Summary Judgment and granting 18 defendant's Motion for Summary Judgment. Signed by District Judge George Caram Steeh (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FAITH HAVEN SENIOR CARE
CENTRE,
Plaintiff,
Case No. 13-CV-11557
HON. GEORGE CARAM STEEH

vs.
SEIU HEALTHCARE MICHIGAN,
Defendant.
_____________________________/

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
AND DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
Mara Stockard, a cook formerly employed by plaintiff nursing home, Faith Haven
Senior Care Centre (“Faith Haven”), was terminated on May 25, 2012, pursuant to a
progressive discipline policy after her fourth alleged violation of company rules. Her
union, SEIU Healthcare Michigan (“Union”), brought a grievance on her behalf against
her former employer alleging that her termination violated the collective bargaining
agreement (“CBA”) which provides that any discharge be for “just cause.” Pursuant to
the CBA, the grievance was submitted to arbitration. The arbitrator ruled that the
discharge was not for “just cause,” based on his finding that Faith Haven failed to prove
that one of the four alleged infractions, wearing open toed shoes in the kitchen, was
subject to discipline, and that Faith Haven did not provide Stockard with due process.
Invoking § 301 of the Labor Management Arbitration Act, 29 U.S.C. § 185, Faith Haven
filed a complaint here seeking to vacate the award. The Union filed a counterclaim
seeking to have the arbitration award enforced. Cross-motions for summary judgment
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are pending. Because the arbitrator arguably construed the CBA in deciding that Faith
Haven lacked just cause to discharge Stockard, the arbitration award shall be affirmed.
Oral argument in this matter had been scheduled for February 10, 2014, but upon
further review of the parties’ briefs, this matter shall be decided based on the written
submissions pursuant to Local Rule 7.1(f)(2).
I. BACKGROUND
Stockard began working for Faith Hill in 2008 as a dietary aide and subsequently
was promoted to the position of cook. Stockard was disciplined four times beginning in
late 2011 and culminating in her discharge on May 25, 2012. On December 27, 2011,
Stockard arrived thirty-minutes late for her 5:30 a.m. shift which caused her to fail to
serve breakfast to a patient on his way to dialysis. She then punched out thirty-minutes
after her scheduled shift end. For this misconduct, Faith Haven issued her an oral
warning charging her with a Group I, Rule 13 violation for “failure to perform job
description satisfactorily, and according to established job description.” (Doc. 21, Ex.
C). On May 16, 2012, Stockard allegedly engaged in a loud and profane argument with
a co-worker who happened to be her mother. On May 22, 2012, Faith Haven issued a
written warning charging her with a Group II, Rule 2 violation for the altercation with her
mother, for which immediate suspension and possible termination were possible
consequences. (Doc. 21, Ex. D). At the arbitration hearing, Faith Haven supervisor
Laura Shoop testified that she could not remember the events of May 16, 2012.
(Arbitration Opinion at 6), and Stockard denied using any profanity. Id. at 9. On May
20, 2012, Stockard reported to work wearing flip flops and presenting a rash on her feet.
After her supervisor pointed out the violation of the company’s dress code, she
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immediately borrowed shoes and socks from a coworker. For her dress code violation,
Faith Haven issued a third step discipline by way of a written warning that she had
violated Group 1, Rule 8. (Doc. 17, Ex. E). On May 22, 2012, Stockard failed to deliver
snacks and failed to conduct prep work. (Doc. 17, Ex. F). During the arbitration
process, Stockard admitted to these charges but claimed that extenuating
circumstances, namely that the snacks were past their expiration date and all workers
were behind in their work, justified her infractions. Finally, on May 23, 2012, Stockard
failed to clean her work area at the end of her shift. Id. During arbitration, Stockard
admitted to this infraction but claimed that mitigating circumstances excused her lapse.
On May 25, 2012, Faith Haven issued its fourth and final discipline of Stockard for the
May 22 and 23, 2012 violations, and discharged her.
On the same date, the Union filed a grievance challenging her termination. Faith
Hill denied that grievance and the Union appealed. The matter was brought before
Arbitration on January 24, 2013. In his written opinion, the arbitrator ruled that
discharge under the four-level progressive discipline was not warranted because the
incident involving the dress code violation was such a minor infraction, no disciplinary
action should have been taken. Absent that discipline, the arbitrator ruled that
discharge for progressive disciple was not warranted as the four-level process had not
been met. The arbitrator also ruled that discharge was also inappropriate based on
certain procedural infirmities.
The CBA covering dietary aides and cooks sets forth several provisions that are
relevant here. Section 4.1 provides:

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Section 4.1 The Employer retains the exclusive right to manage the facility; to
direct, control and schedule its operations and work force and to make any and
all decisions affecting the business, whether or not specifically mentioned herein.
Such prerogatives, authority, and functions shall include but are not limited to the
sole and exclusive right to:
1.

12.

Hire, promote, demote, layoff, assign, transfer, suspend, discharge
or discipline employees for just cause.
...
Promulgate, post and enforce reasonable rules and regulations
governing the conduct and acts of employees during work hours.

Section 11.2 provides that an “[e]mployee may not be disciplined, suspended or
discharged except for just cause.” Section 11.3 sets forth the progressive discipline
policy. It provides:
Section 11.3 The type of reasonable penalty imposed in any instance depends
on the nature of seriousness of the offense involved. Discipline may consist of
four written types:
1. Oral Warning
2. Written Warning
3. Final Written Warning or Suspension
4. Discharge
Section 19.11 provides that “[t]he arbitrator shall have no power to add to, subtract from,
modify or amend any provisions of this Agreement.”
Pursuant to the powers given to it in the CBA, Faith Haven has established
certain Standards of Conduct, which are presented in writing and given to all
employees. Those Standards set forth two Groups of Rules. Group I Rules normally
involve a progressive discipline approach, while Group II Rules provide for possible
immediate termination. Specifically, Group I Rules provide:
Disciplinary action for violations of Group I rules will normally follow a progressive
discipline approach. However, the Company may initiate discipline at a higher
step depending on the severity and circumstances surrounding the incident.
Progressive discipline involves four steps:
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Step one: Verbal coaching. . .
Step two: Formal counseling . . .
Step three: Written warning: (. . . Probation and or suspension may also
occur at this step).
Step four: Termination of employment.
(Doc. 17, Ex. B). Group I Rules set forth the following rules which Stockard is accused
of violating:
8.

Failure to abide by the company’s dress code.

13.

Failure to perform job duties satisfactorily, and according to established
job description.

Id. Group II Rules provide “[d]isciplinary action for Group II rules will normally involve
immediate suspension without pay pending an investigation of the incident and if
warranted, termination.” Id. Group II Rules set forth the following provision which
Stockard is accused of violating: “[t]hreatening, harassing, intimidating or abusing
Company employees, residents or visitors, including verbal abuse and use of obscene
language.” Id. Although Group II Rule violations do not require progressive discipline,
during arbitration proceedings, Faith Haven did not argue that discharge was proper
short of the four-violations required under the progressive discipline policy. (Doc. 17,
Ex. J).
II. STANDARD OF LAW
This court’s review of an arbitration award is extremely limited. Truck Drivers
Local No. 164 v. Allied Waste Sys., Inc., 512 F.3d 211, 216 (6th Cir. 2008). The Sixth
Circuit has explained that in light of federal policy in favor of arbitration, “a court’s review
of an arbitrator’s decision is very narrow; ‘one of the narrowest standards of judicial
review in all of American Jurisprudence.’” Int’l Ass’n of Machinists & Aerospace Workers
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v. Tenn. Valley Auth., 155 F.3d 767, 771 (6th Cir. 1998) (quoting Lattimer-Stevens v.
United Steelworkers, 913 F.2d 1166, 1169 (6th Cir. 1990)). “As long as the arbitrator’s
award draws its essence from the collective bargaining agreement, and is not merely
his own brand of industrial justice, the award is legitimate.” United Paperworkers Int’l
Union v. Misco, 484 U.S. 29, 36 (1987) (quotations and citations omitted). The standard
of review of an arbitrator’s decision is so liberal, that the Supreme Court has held, “if an
arbitrator is even arguably construing or applying the contract and acting within the
scope of his authority, the fact that a court is convinced he committed serious error does
not suffice to overturn his decision.” Major League Baseball Players Ass’n v. Garvey,
532 U.S. 504, 509 (2001) (quotations and citations omitted). “Judicial review of a laborarbitration decision pursuant to [a CBA] is very limited. Courts are not authorized to
review the arbitrator’s decision on the merits despite allegations that the decision rests
on factual errors or misinterprets the parties’ agreement.” Id. at 509 (citing Misco, 484
U.S. at 36).
The Sixth Circuit has set forth a three-part test for reviewing a final and binding
arbitration award. Mich. Family Res. v. Serv. Employ. Int’l Union Local 517 M, 475 F.3d
746, 753 (6th Cir.) (en banc), cert. denied, 551 U.S. 1132 (2007). The standard requires
the district court to consider three questions:
(1) Did the arbitrator act “outside his authority” by resolving a dispute not
committed to arbitration;
(2) Did the arbitrator commit fraud, have a conflict of interest, or otherwise act
dishonestly in issuing the award; and
(3) In resolving any legal or factual disputes in the case, was the arbitrator
“arguably construing or applying the contract”?
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Id. The Sixth Circuit explained that so long as an arbitrator does not offend any of
these factors, “judicial intervention should be resisted even though the arbitrator made
‘serious,’ ‘improvident,’ or ‘silly’ errors in resolving the merits of the dispute.” Id. Under
the onerous three-pronged test, only the most egregious awards may be vacated. Id.
In fleshing out what the term “arguably construing” means, the Sixth Circuit explained
that it requires only that “the arbitrator appeared to be engaged in interpretation” and
that “consideration of the merits of a dispute is the rare exception, not the rule.” Id. In
Michigan Family Resources, the Sixth Circuit refused to vacate the arbitration award,
despite its finding that the arbitrator made a legal error, because it was an error of
interpretation of the contract. Id. at 756. The Sixth Circuit explained that the parties
bargained for an arbitrator’s construction and that bargain “must be respected even
when time and further review show that the parties in the end have bargained for
nothing more than error.” Id.
III. ANALYSIS
Faith Haven argues that the arbitrator’s decision must be vacated because (1)
the Union’s grievance involved only her termination and thus, he should have
considered the disciplinary violations cited in the May 25, 2012 citation only and not the
dress code violation citation of May 22, 2012, (2) the CBA required mandatory discipline
for any dress code violations, (3) there were no due process violations under the CBA
or the common law, and (4) the arbitrator’s award is contrary to public policy based on
public health concerns.

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1.

Matters Properly Before the Arbitrator
Faith Haven argues that the arbitrator improperly considered Stockard’s dress

code violation in deciding whether there was just cause for her termination. Faith
Haven contends his analysis should have been limited to the final reason given for
termination only, as set forth in the May 25, 2012 citation, on the grounds that she did
not specifically grieve other violations. Faith Haven’s argument lacks merit. Stockard’s
grievance challenged her discharge which necessarily required analysis of all the
underlying disciplinary violations providing the basis for her discharge. Thus, the
arbitrator did not err in considering the alleged dress code violation.
2.

Dress Code Violation
Faith Haven argues that discipline is mandatory for dress code violations and

that the arbitrator erred in holding that no discipline was warranted for the incident
involving Stockard arriving in flip flops and immediately changing when asked to do so.
In support of this argument, Faith Haven relies on two cases which are inapposite. In
SEIU Healthcare Mich. v. St. Mary’s Acquisition Co., No. 09-13215, 2010 WL 2232218
(E.D. Mich. May 27, 2010), the district court vacated the arbitrator’s award where the
arbitrator found mitigating circumstances prevented the employer from discharging an
employee for sleeping on the job when the collective bargaining agreement provided for
mandatory termination in those circumstances. Faith Haven also relies on International
Brotherhood of Electrical Workers, Local 429 v. Toshiba America, Inc., 879 F.2d 208
(6th Cir. 1988), where the court ruled the arbitrator erred in reinstating discharged
workers where the collective bargaining agreement called for mandatory termination of
workers who engaged in illegal walk-outs and further provided, “[a]ny disciplinary action,
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including discharge taken as a result of a violation of [the no-strike clause] . . . shall not
be altered or amended in the grievance and arbitration procedures, the sole issue for
presentation to the arbitrator and decision by him being whether or not the employees
engaged in conduct in violation of [the no-strike clause].” Id. at 210.
In contrast to the cases relied upon by Faith Haven, the CBA provision here does
not unequivocally mandate discipline for dress code infractions. Instead, Section 11.3
of the CBA provides for discretionary discipline: “[t]he type of reasonable penalty
imposed in any instance depends on the nature of the seriousness of the offense
involved.” (CBA at § 11.3) (emphasis added). Section 4.1 of the CBA authorizes Faith
Haven to promulgate rules and regulations and set performance standards. Faith
Haven’s Group I Rules provide, “[d]isiplinary action for violation of Group I rules will
normally follow a progressive discipline approach. However, the Company may initiate
discipline at a higher step depending on the severity and circumstances surrounding the
incident.” Id. at 26 (emphasis added). An arguable interpretation of the term “normally,”
as used above, suggests that the employer maintains discretion as to whether or not to
impose progressive discipline for Group I violations. Because the CBA and the
Standard Code of Conduct provide the employer with some discretion as to the penalty
to be imposed based on the “seriousness” of the offense, the arbitrator acted within his
discretion when he determined that Stockard should not have been disciplined for
wearing open toed shoes when she immediately changed into socks and closed shoed
toes, borrowed from a coworker, when informed of the dress code violation. Even if this
court were to disagree about the “seriousness” of the violation, it is not this court’s role
to second guess the arbitrator when the arbitrator is arguably construing the CBA.
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In his opinion, the arbitrator states that because of his finding that Stockard’s
wearing of flip flops was not an offense subject to discipline, and that violation
constituted one of four grievances justifying her termination, she must be reinstated.
Specifically, he stated that his finding that wearing flip-flops was not an offense subject
to discipline “creates a disciplinary gap which standing alone, is sufficient to overturn the
discharge.” (Arbitration Opinion at 17). During the arbitration proceedings, Faith Haven
argued that discharge was warranted under the four-step progressive discipline policy.
Having failed to argue that discharge might still be warranted even if less than four
violations were proven, Faith Haven waived the argument, and the arbitrator did not err
in failing to determine whether discharge would still be warranted based on the other
three alleged violations. Because the arbitrator arguably construed the CBA when he
determined that discharge was not warranted under the four-step progressive discipline
policy because the minor dress code violation did not merit any disciplinary action, the
court does not reach the question of whether alleged due process violations also
support the award.
3.

Public Policy
Finally, the court considers whether the arbitrator’s award is invalid on public

policy grounds. In deciding whether an arbitrator’s decision violates public policy, the
court considers whether the arbitrator’s construction of the CBA jeopardizes a “well
defined and dominant” public policy, taking the facts as found by the arbitrator. Misco,
484 U.S. at 43. Here, Faith Haven argues that the public has a strong interest in
maintaining nursing homes that comply with federal and state safety and health
regulations, and that Stockard’s conduct in wearing open toed shoes in the kitchen
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conflicts with these policies. Certainly, the public has an interest in maintaining health
and safety standards governing nursing facilities, but Faith Haven has not shown that
the arbitrator’s decision here undermines those policies where Stockard immediately
corrected her behavior when asked to do so by management.
IV. CONCLUSION
Because the arbitrator’s decision arguably construed the CBA, the arbitration
award hereby is AFFIRMED. Accordingly, the Union’s motion to enforce the arbitration
award and for summary judgment (Doc. 18) hereby is GRANTED. Faith Haven’s
motion for summary judgment and to vacate the arbitration award (Doc. 17) hereby is
DENIED.
SO ORDERED.
Dated: January 21, 2014
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE

CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
January 21, 2014, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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